Tip of the Month - August, 2021

Property Management and Managing Risk (cont. July 2021)

Source: Robert C. Kyle & Floyd M. Baird, RPA/SMA

SUPPLY & DEMAND: The occupancy rate for a particular type of property reflect the relationship between supply and demand for that type of space at its current rental level.  Because occupancy and vacancy rates are continually fluctuating, so too are supply and demand. A high occupancy rate indicates a shortage of space and the possibility of rental increases. A low rate will result in tenant demands for lower rents or other concessions as the tenants negotiate from a position of market strength.

 The final checkpoint in the managerís survey of a neighborhood is more relevant to residential property managers than to managers of commercial or industrial real estate.  Nonetheless, any amenities that make the neighborhood attractive to potential residents will indirectly benefit business and industry to providing a local pool of potential consumers and employees.  When touring the neighborhood, the manager should note the number and location of parks, playgrounds, theaters, restaurants, schools, colleges, places of worship and any other social or cultural organizations that will be attractive to potential tenants.

This web page was updated on 07/31/2021.